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IPFS News Link • Obamacare

Why is Obamacare so expensive? How lawmakers could help lower Arizona premiums

• by Jeffrey Singer

Obamacare's open enrollment period is underway.

Once again, Arizonans are facing another jump in Obamacare premiums (average: 4.3%). This year's increase means that, since 2016, Obamacare premiums have risen a cumulative 279%.

A new federal study highlights one likely cause: Arizona's health ?insurance markets are becoming less competitive. State lawmakers can turn the situation around by freeing consumers and employers to buy better, more affordable health plans from Puerto Rico and other U.S. territories.

Fewer Obamacare choices leads to higher prices

Health insurance obeys the same economic laws as other products: barriers to entry lead to insufficient competition, fewer choices and higher prices.

"Insurance premiums … respond strongly to competition, and markets with more insurers have substantially lower premiums," economist Martin Gaynor wrote in 2020. Gaynor cited economic studies showing that eliminating an insurer for an employer to choose from can lead to premium increases of up to 16.6%.